Imagination gives profit warning

LONDON – Processor licensing company Imagination Technologies Group plc (Kings Langley, England) has issued has warned that pre-tax profit and licensing revenue will be lower than previously expected for the financial year to April 30, 2013.

On Thursday (May 2) the firm's share price opened on 17 percent down on the London Stock Exchange at 351.23 pence.

In a statement the company said that due to a number of deals being subject to short-term delays it now expects licensing revenue – excluding MIPS deals – to be at £27 million (about $42 million) for the year. "We are confident this timing issue is a short term phenomenon related to the 'lumpy' nature of licensing revenues," the statement said.

Imagination said the delays were due to "structural and organizational changes" at a number of semiconductor partners.

The company said that generally the business is healthy and that it now expects licensing revenue, excluding MIPS, for the 2014 financial year to be between £30 million and £35 million (between about $46 million and $55 million).

"Whilst we continue to see strong demand for our technologies, we are disappointed that the licensing revenues are below our expectations in this period. Despite these short-term timing issues, we continue to see growing partner engagements across our key technologies - these include a number of very significant, strategic deals. The volume shipment ramp up continues apace towards our target of one billion units in 2016 (excluding MIPS) whilst the licensing pipeline remains as active, strong and sound as ever," said Sir Hossein Yassaie, CEO of Imagination, in the statement.

For the full year unit shipments are expected to be in excess of 500 million units with average royalties maintained at a similar level to that achieved in the first half of the year the company said. The performance of the recently acquired MIPS business is in line with expectations in terms of both licensing and royalty revenues.

Imagination is due to publish its financial results for the year to April 30, 2013 on June 19.

It doesn't help that STE have pretty much disappeared killing any of the products based on Series6, TI have refocused the OMAP business away from mobile (where all the volumes are) and even the S4 is based on Snapdragon in the key regions. Renesas again defocusing away from mobile. Who does that leave other than Apple ?. Mediatek I guess, but then even they have just announced a chip based on an ARM Mali processor.